IN SUMMARY Accounting Help

We now have discussed three methods of evaluating the financial aspects ‘of capital investment opportunities. The financial consequences of capital investments are relevant even if the business has )little choice but to make the expenditure.You probably notice how. much income taxes complicated our analysis of decisions about replacing’ assets. Income taxes do complicate business decisions-and in many situations, it is tax considerations that dictate the appropriate course of action. We urgent all financial decision makers always to consider the tax consequences of their actions . .Don’t forget that non financial considerations drive many business decisions. Businesses must operate in a socially responsible manner, which often -involves a sacrifice of profitability-especially in the short term. Remember also the concept of opportunity costs. There often is a better ‘way awaiting discovery by those who are perceptive, innovative, and persistent.

Posted on November 24, 2015 in Capital Budgeting

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